CA Inter doubt
How do I compute Gross Annual Value of a let-out house with vacancy and unrealised rent?
Can show me the process to solve that question
Can show me the process to solve that question
Asked by Rajuu··1 answer
1 reply
BrunoAI answerAI first answer — verify with your teacher
Gross Annual Value (GAV) = Rs. 60,000. Steps under Sec 23(1): 1. Expected Rent (ER) = Rs. 82,000 2. Actual rent for the let period (1.4.25 to 31.1.26) = 7,000 x 10 = 70,000 Less unrealised rent = 10,000 Actual rent received/receivable = 60,000 3. Check whether the fall is due to vacancy: rent for the full year would be 7,000 x 12 = 84,000, which is more than ER of 82,000. So actual rent is below ER only because of vacancy. 4. In that case, GAV = actual rent received/receivable = Rs. 60,000. Note: unrealised rent is deducted only if the Rule 4 conditions are met. Assume they are unless the question says otherwise.
Related questions
What is expected rent for house property?
Expected rent is the sum for which the property might reasonably be expected to be let from year to year, generally based on municipal value, fair rent and standard rent where applicable.
When is unrealised rent deducted from actual rent?
Unrealised rent is deducted only if the Rule 4 conditions are met, such as a bona fide tenancy and reasonable steps taken to recover the rent.
Why does vacancy matter in computing GAV?
If the actual rent falls below expected rent because the property was vacant, the law takes actual rent received or receivable as GAV instead of expected rent.
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